1.What kinds of risk are included in investment risk? Go online to survey current or recent financial news. Find and present a specific example of the impact of each type of investment risk. In each case, how did the type of risk affect investment performance?
The risks that are included in investment risk are:
• economic risks,
• industry risks,
• company risks,
• asset class risks,
• market risks.
2.What four measures are the most important indicators of the health of the economy? What are the other leading economic indicators? Go to a financial news source to find out the status of all the economic indicators at this time. Make note of your findings and the date for purposes of comparison. How does the information inform you as an investor?
The four measures are:
• Gross domestic product (GDP) is a common measure of the value of output.
• Inflation measures the currency's purchasing power.
• Unemployment measures the extent to which the economy creates opportunities for participation.
• Interest rates affect the future value of money.